-318-
Sec. 6231(a)(3); sec. 301.6231(a)(3)-(1)(a)(1)(i), Proced. &
Admin. Regs.
Section 6231(a)(1)(A) defines the term “partnership” and
identifies the partnerships that are subject to the TEFRA
partnership provisions. Section 6231(a)(1)(B), in general,
excludes “small partnerships” from the section 6231(a)(1)(A)
definition of “partnership”.128 A small partnership generally is
a partnership (1) that has 10 or fewer partners, (2) all of whose
partners are either estates or natural persons who are U.S.
citizens or resident aliens, and (3) where each partner’s share
of each partnership item is the same as the partner’s share of
every other partnership item. Sec. 6231(a)(1)(B)(i); sec.
301.6231(a)(1)-1T(a)(1) through (3), Temporary. Proced. & Admin.
Regs., 52 Fed. Reg. 6789 (Mar. 5, 1987). A determination of
whether a partnership qualifies as a small partnership is to be
made for each of the partnership’s taxable years. Sec.
301.6231(a)(1)-1T(a)(4), Temporary. Proced. & Admin. Regs., 52
Fed. Reg. 6789 (Mar. 5, 1987).
C. The STJ Report
Applying the test articulated in Commissioner v. Culbertson,
337 U.S. 733, 742 (1949), the STJ report, at 103-105, recommended
holding that each of the named partners of Century Industries
128 A small partnership may elect to have the TEFRA
partnership provisions apply. Sec. 6231(a)(1)(B)(ii). However,
the parties agree Century Industries made no such election for
1983 through 1986.
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